Vegas Is Arena City

The 17,500-seat arena, inspired by the business model of the renovated Forum in Inglewood, Calif., includes the efforts of Azoff MSG Entertainment, Live Nation and Oak View Group – the sports and entertainment global advisory, development and investment company launched by Irving Azoff and former AEG chief Tim Leiweke.

The arena is reportedly privately financed and the financing is secured, with Sands providing most of it.

The cost and groundbreaking date of the arena are not known because permits are still being cleared, according to Azoff, who told the Los Angeles Times it’s a “matter of when, not if.” The 400,000-square-foot facility is to be located on Sands Avenue between Manhattan Street and Koval Lane, with connections to Sands’ Venetian and Palazzo properties. The announcement arrives soon after the opening of Las Vegas’ first new arena in two decades, T-Mobile Arena, a property funded by MGM International and Live Nation rival AEG.

Unlike T-Mobile, which is attempting to lure an existing or expansion pro hockey team with state-of-the-art locker rooms and a community thirsty for pro sports, the unnamed Sands property will focus solely on concerts with the occasional boxing/UFC event thrown in. When MSG Chairman James Dolan announced the company was planting its flag in the Los Angeles market with the purchase and renovation of the Forum, he made it clear the property would be guided by music manager and all-around powerhouse Azoff. The renovation was unique: it was designed with music as its purpose and the results in 2014 were universally applauded by the concert industry, from its sightlines to its sound system and concourse to its ingress/egress.

Azoff and MSG, after a year of success – including the launch by Azoff clients Eagles – made no bones they were considering expanding the model to other markets. The Forum proved it could compete in a crowded market, notably against the Staples Center, which has plenty of sports tenants that block out potential playoff weeks. In 2015, it ranked fourth in North America for arena ticket sales behind New York’s Madison Square Garden, Brooklyn’s Barclays Center, Toronto’s Air Canada Centre and Rosemont, Ill.’s Allstate Arena (with Nashville’s Bridgestone Arena and Staples Center just clicks behind).

It should be noted that although the Forum is unique in its dedication to music, other arenas, such as the Sprint Center in Kansas City, Mo., have found concerts a sustainable revenue source as they await sports tenants. The Las Vegas model mirrors the Forum in fan-friendliness by having all of its seats “in front of the stage.” A source told Pollstar that meant a horseshoe design with a large floor. Although Live Nation has exclusivity as a ticketing provider – i.e., Ticketmaster – for the Las Vegas arena, it is expected to be an open building.

It is also expected to have suites that are “bunker-type” rather than the unpopular glassed variety. It is also expected to be scalable from 4,000 to 17,500 seats. Sands owner Sheldon Adelson said the new arena would be home to the Billboard Music Awards, if still available. As for competition, MSG is confident Vegas has room for a new music provider, with Dolan calling it “underserved.” Along with T-Mobile, the city has the 15,520-capacity MGM Grand Garden Arena, home to most boxing matches as well as events like Rush and the Academy of Country Music Awards.

All three arenas would exist within two miles of each other. Meanwhile, Sands has partnered with Majestic Realty on plans to bring a publicly financed stadium to Las Vegas to lure the Oakland Raiders.

There is also the aging 18,500-capacity Thomas & Mack Center on the campus of UNLV and distant from the Strip, but it is in the middle of a $72.5 million revitalization. Meanwhile, there is the vapor-like $1.4 billion hotel/arena project that “broke ground” next to the SLS Las Vegas in 2014, with developer Jackie Robinson hiring Comcast-Spectacor for programming. David “Doc” O’Connor, president and CEO of Madison Square Garden Company, is unfazed by Las Vegas’ big rooms.

Saying the company “struck gold” with the Forum, he told the Los Angeles Times there are 42 million visitors to Vegas annually so there are enough butts to go around. He added that there were a mere 48 concerts in Vegas last year at buildings of 9,000 capacity or more whereas Los Angeles had 180 comparable events.

“There has not been an incentive for major, premium-quality acts to come to Las Vegas on a number of levels,” he said. That being said, business is synonymous with competition and it’s difficult to argue so many arenas can be successful without somebody in the food chain getting less meat.